The following account balances and other information for Barfield Company pertain to November operations: Account Balances November 1 November 30 Finished goods P 70,000 P 60,000 Work in process 50,000 ? Direct materials 10,000 25,000 Accounts payable ? 15,000 Accrued payroll 10,000 20,000 Accumulated depreciation - factory equipment 80,000 90,000 Other information: Direct materials purchase on account during November, P50,000. Barfield Company applies factory overhead at a predetermined rate of P3 per direct labor hour. During November, direct labor employees worked 25,000 hours at a rate of P4 per hour. Jobs 385, 386, and 387 were still in process at the end of November. A total of P5,000 direct materials has been charged to these three jobs. To date, 5,000 direct labor hours have been worked on these jobs. The accrued payroll account is used for factory employees only. Assuming no payroll deductions, payment to factory employees during the month totaled P140,000. Factory overhead was underapplied by P5,000. Payments on account totaled P55,000. Required: Determine the following – Direct materials charged to operations Factory overhead applied during the month Ending inventory of work in process
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The following account balances and other information for Barfield Company pertain to November operations:
|
Account Balances |
|
|
November 1 |
November 30 |
Finished goods |
P 70,000 |
P 60,000 |
Work in process |
50,000 |
? |
Direct materials |
10,000 |
25,000 |
Accounts payable |
? |
15,000 |
Accrued payroll |
10,000 |
20,000 |
|
80,000 |
90,000 |
Other information:
- Direct materials purchase on account during November, P50,000.
- Barfield Company applies factory
overhead at a predetermined rate of P3 per direct labor hour. - During November, direct labor employees worked 25,000 hours at a rate of P4 per hour.
- Jobs 385, 386, and 387 were still in process at the end of November. A total of P5,000 direct materials has been charged to these three jobs. To date, 5,000 direct labor hours have been worked on these jobs.
- The accrued payroll account is used for factory employees only. Assuming no payroll deductions, payment to factory employees during the month totaled P140,000.
- Factory overhead was underapplied by P5,000.
- Payments on account totaled P55,000.
Required: Determine the following –
- Direct materials charged to operations
- Factory overhead applied during the month
- Ending inventory of work in process
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